India’s power generation companies have quadrupled their natural gas purchases from a domestic bourse over the past couple of months to meet surging power demand from searing summer heat.
The Indian Gas Exchange, the country’s largest gas-trading platform, sold 4.5 trillion British Thermal Units to power firms from April 1 through May 26, according to data shared by the company. That’s an almost 350% jump from the same period a year earlier.
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Large swathes of India have suffered from blistering heat waves this summer, with sweltering temperatures around-the-clock pushing peak electricity demand to new highs during the days and nights.
The nation has used gas-fired power capacity to help meet the demand surge during the hot nights, although the war in Iran has pushed up prices and made the fuel harder to buy than in previous years. That has resulted in supply shortfalls of as much as 5 gigawatts during peak night-time hours, data from Grid Controller of India show.
Natural gas still accounts for just 2% of India’s electricity mix. The country has about 20 gigawatts of gas-fired capacity, which is mostly used as a reserve to meet demand surges in the evenings. This summer, less than half that capacity has been utilized due to shortages of gas.
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The entire volume sold to the power sector this summer is regasified liquefied natural gas, said Rajesh Kumar Mediratta, the chief executive officer of the exchange. Companies paid an average 1,769 rupees ($18.55) per million Btu to buy the fuel from the bourse during the April-May period, about 64% more than a year earlier, IGX data show.
